John Fullerton’s white paper, Regenerative Capitalism, lists eight principles critical to systemic economic health. The Capital Institute’s research group, Research Alliance for Regenerative Economics (RARE), uses recent scientific advances—specifically, the physics of flow —to create a logical and measurable explanation of how these principles work to make or break vitality in the human networks of which economies are built. Here we explain why too much inequality is more than a moral problem. In fact, it drives economic systems towards collapse by sucking the life-blood out of real economies worldwide.
According to a recent study by Oxfam International, in 2010 the top 388 richest people owned as much wealth as the poorest half of the world’s population—a whopping 3.6 billion people. By 2014, this number was down to 85 people. Oxfam claims that, if this trend continues, by the end of 2016 the top 1 percent will own more wealth than everyone else in the world combined. At the same time, according to Oxfam, the extremely wealthy are also extremely efficient in dodging taxes, now hiding an estimated $7.6 trillion in offshore tax-havens.
Why should we care about such gross economic inequality? After all, isn’t it natural? The science of flow says: yes, some degree of inequality is natural, but extreme inequality violates two core principles of systemic health: circulation and balance. MORE